2021 (2) TMI 898 - AT - Income Tax

Addition on account of the amount credited in the capital account of partner - HELD THAT - As assessee explained the source of the partner for depositing the amount in the capital account. The said amount was received by the partner from her son who is NRI, the transaction was through banking channel out of the NRE saving bank account of her son, therefore the addition made by the A.O. was not justified. Moreover the amount was received by the assessee firm from the partner who explained the source for the same and if at all any addition was called for that was required to be made in the hands of the partner and not in the hands of assessee firm. On an identical issue in the case of ITO Vs. Nahar Singh Sadhu Singh 2001 (7) TMI 62 - PUNJAB AND HARYANA HIGH COURT held that the partner had the requisite amount to invest towards the capital account of the firm. Since no evidence had been pointed out against that finding the amount could not be assessed as income from undisclosed sources of the firm. - Thus impugned addition was rightly deleted by the Ld. CIT(A). Addition on account of amount received from Shri Ankush Gupta - HELD THAT - Assessee received a sum from Shri Ankush Gupta through banking channel and the source of source was explained by the assessee by furnishing the documentary evidences to prove the credit worthiness of Shri Punit Gupta and Shri Akash Bansal from whom Shri Ankush Gupta received the amount. The said documents revealed that the amount of ₹ 32,00,000/- was received by Shri Ankush Gupta from his brother Shri Puneet Gupta who is the NRI and settled in UK. The said amount was transferred from the NRE account. The Assessee also explained the source of another amount of ₹ 9,50,000/- received by Shri Ankush Gupta from his cousin Shri Akash Bansal by furnishing the copy of bank account of Shri Akash Bansal, therefore the addition made by the A.O. was not justified and the Ld. CIT(A) rightly deleted the same particularly when the assessee proved the identity and creditworthiness of depositor as well as genuineness of transaction. Addition on account of the transaction with M/s Shree Radha Commodity Services - CIT- A delete the addition - HELD THAT - As decided in own case 2019 (10) TMI 1404 - ITAT CHANDIGARH as cash deposited in the bank account of M/s Radha Commodity Services was accepted by the Department as genuine while framing the assessment under section 143(3) for the same A.Y. 2013-14; in the case of Shri Kushal Gupta proprietor of M/s Radha Commodity Services from whom the assessee received the loan through banking channel. We therefore do no see any valid ground to interfere with the findings given by the Ld.CIT(A) on this issue.

Summary

Issues Involved:
1. Deletion of addition of ?20,50,000/- credited in the capital account of Smt. Swaran Kanta.
2. Deletion of addition of ?40,50,000/- received from Shri Ankush Gupta.
3. Deletion of addition of ?3,88,82,000/- from M/s Shree Radha Commodity Services.

Issue-wise Detailed Analysis:

1. Deletion of addition of ?20,50,000/- credited in the capital account of Smt. Swaran Kanta:
The Department contested the deletion of ?20,50,000/- credited in the capital account of Smt. Swaran Kanta. The Assessing Officer (A.O.) treated this amount as unexplained income due to lack of evidence. The assessee argued that the amount was received from Smt. Swaran Kanta's son, Puneet Gupta, an NRI, through his NRE account and provided relevant bank statements. The Ld. CIT(A) considered the submissions and remand report, noting that the funds were transferred through banking channels and the source was adequately explained. The Ld. CIT(A) concluded that the addition was unjustified and deleted it. The Tribunal upheld this decision, emphasizing that if any addition was warranted, it should have been in the hands of Smt. Swaran Kanta, not the firm.

2. Deletion of addition of ?40,50,000/- received from Shri Ankush Gupta:
The A.O. added ?40,50,000/- received from Shri Ankush Gupta as unexplained credit. The assessee provided evidence that the amount was received from Ankush Gupta's brother, Puneet Gupta, and cousin, Akash Bansal, through banking channels. The Ld. CIT(A) accepted the explanation and deleted the addition, noting that the source and creditworthiness were adequately demonstrated. The Tribunal agreed with the Ld. CIT(A), stating that the identity and creditworthiness of the depositor and the genuineness of the transaction were proven, and thus the addition was rightly deleted.

3. Deletion of addition of ?3,88,82,000/- from M/s Shree Radha Commodity Services:
The A.O. added ?3,88,82,000/- received from M/s Shree Radha Commodity Services as unexplained credit. The assessee argued that similar transactions were accepted as genuine in previous assessments. The Ld. CIT(A) noted that the creditor's assessments for relevant years did not result in any additions, indicating the genuineness of the transactions. The Tribunal upheld the Ld. CIT(A)'s decision, referencing a similar case for the A.Y. 2008-09 where the addition was deleted, reinforcing the consistency in the creditor’s financial dealings.

Conclusion:
The Tribunal dismissed the Department's appeal, affirming the Ld. CIT(A)'s deletions of the additions for all three issues, based on thorough examination of evidence, banking transactions, and consistency with previous assessments.